Ad­di­tional bor­row­ing will help City of Swift Cur­rent to fund cap­i­tal projects

Prairie Post (East Edition) - - Front Page - BY MATTHEW LIEBENBERG — mlieben­[email protected]­

The City of Swift Cur­rent will be bor­row­ing close to $5 mil­lion to fund some of the projects in the 2019 cap­i­tal in­vest­ment bud­get. Coun­cil­lors approved a motion at a reg­u­lar coun­cil meet­ing on April 22 to ad­vise the pub­lic of coun­cil's in­ten­tion to con­sider a bor­row­ing by­law for fi­nanc­ing within gen­eral govern­ment and util­ity op­er­a­tions.

“In a per­fect world it would be nice if we didn't have to have any debt,” Coun­cil­lor Ron Toles said dur­ing the discussion.

He noted that the bor­rowed money will be used to fund cap­i­tal projects that are nec­es­sary and have to be done.

“There's very little on that list of things that are not es­sen­tial items,” he said.

The City will be bor­row­ing $4,993,877 to fund var­i­ous projects in the 2019 cap­i­tal bud­get. This ad­di­tional debt will mean there will not be a sig­nif­i­cant change in the City’s debt load by the end of the cur­rent year.

The City’s prin­ci­pal amount of debt for gen­eral govern­ment and util­ity op­er­a­tions was $60,766,828 on Dec. 31, 2018. Af­ter the ad­di­tional bor­row­ing and with debt re­pay­ments this year, the City’s fore­casted prin­ci­pal amount of out­stand­ing debt will be $60,751,637 on Dec. 31, 2019. This will be a re­duc­tion in debt of $15,191 com­pared to the end of last year. Mayor De­nis Per­rault felt it will be a pos­i­tive outcome that the City’s debt will still be close to what it is now af­ter the ad­di­tional bor­row­ing.

“At the end of this year, we're look­ing even with this added, we'll still come out very close to ex­actly where we are to­day,” he told the meet­ing. “That's a good point to make, I think, and that's just be­cause of the cur­rent por­tion of the long-term debt that we'll be mak­ing. As well, we are in a growth pe­riod and we're try­ing very hard to be ready for that growth and also to be very re­spon­si­ble in the in­fra­struc­ture dol­lars that we're try­ing to put for­ward.”

He added that this amount for which coun­cil will be con­sid­er­ing a bor­row­ing by­law has not changed from the orig­i­nal amount that the City an­tic­i­pated will have to be bor­rowed when the 2019 bud­get was an­nounced in De­cem­ber.

The City's Gen­eral Man­ager of Cor­po­rate Ser­vices Kathy Hopfner said this bor­rowed amount is fully funded in the 2019 bud­get, and no fu­ture tax in­crease will there­fore be re­quired to fund this ad­di­tional debt.

“The wa­ter/wastew­a­ter util­ity debt is funded through wa­ter rates and they were in­creased two per cent on Jan. 1,” she men­tioned af­ter the meet­ing. “Then with the gen­eral op­er­at­ing bud­get, the over­all tax in­crease is 2.9 per cent and 1.6 per cent of the 2.9 of the tax in­crease will be used to pay the prin­ci­pal and in­ter­est debt on the new bor­row­ings.”

The new debt will be paid off over ei­ther a 10-year or 20-year pe­riod, but in most cases the fi­nanc­ing term will be for 20 years.

“The max­i­mum amount of time that we have, the bor­row­ing term, is 20 years,” she said. “What we do is we bor­row based on the life of the as­set. So if you see some 10year bor­row­ing there, that's usu­ally per equip­ment and our equip­ment re­place­ment is usu­ally in 10 years.”

The largest por­tion of the bor­rowed funds – an amount of $3,690,856 – will be al­lo­cated to cap­i­tal projects un­der gen­eral govern­ment. The projects funded un­der gen­eral govern­ment are the re­ha­bil­i­ta­tion the his­toric CPR weir, Chinook Park­way de­vel­op­ment, flood mit­i­ga­tion, the City’s as­set man­age­ment ini­tia­tive, the ser­vice cen­tre roof re­place­ment, storm sewer re­place­ment along 1st Av­enue NE from Chap­lin Street to Chea­dle Street, the re­ha­bil­i­ta­tion of the in­ter­sec­tion at the cor­ner of Chap­lin Street and 1st Av­enue NW, the re­ha­bil­i­ta­tion of paved streets, side­walks and curb­ing, and the pur­chase of a new elec­tric ice resur­facer.

The re­main­ing $1,303,021 in bor­rowed money will be used to fund cap­i­tal projects un­der the wa­ter and wastew­a­ter util­ity fund.

An amount of $893,021 will fund wa­ter dis­tri­bu­tion projects, $320,000 will be used for wastew­a­ter treat­ment projects, and $90,000 will fund wastew­a­ter col­lec­tion projects.

The in­di­vid­ual projects to be funded are the con­tin­u­a­tion of the biosolids man­age­ment pro­gram, im­prove­ments to the South Hill pres­sure zone, the South Hill reser­voir up­grade, im­prove­ments to down­town in­ter­sec­tions, up­grad­ing the bulk wa­ter sta­tion truck fill system, up­grad­ing fil­ter head­works pip­ing to improve flow to fil­ters, the in­stalling of an ac­t­i­flo clar­i­fiers air scour system, and the fund­ing of re­hab pro­grams for hy­drants, wa­ter valves, and san­i­tary man­holes.

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